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Coal Transition Impacts and the Approach to Inclusive Just Transition Policies in Indonesia report cover showing a man dressed in a safety vest and hard hat standing with his back to the camera.

Coal Transition Impacts and the Approach to Inclusive Just Transition Policies in Indonesia

This publication examines the economic, social, and gendered impacts of potential coal mine closures across key coal-producing provinces in Indonesia. It explores the best pathways to pursue a just transition, identifying potential sectors, and proposing solutions for including vulnerable communities, such as women and informal workers.

By Refina Muthia Sundari, Anisa Dwi Ariyani Firmansyah, Shanty Oktavilia, Siti Hilmiati Azyzia, Ryan Prayogi, Bathandwa Vazi, Philip Gass on December 1, 2025
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Policy Recommendations

  • Combine quantitative economic models with qualitative, community-based methods, such as ethnography, participatory mapping, and focus groups.

  • Prioritize sectoral transitions and empower local governments. Economic diversification strategies should be put in place well in advance of coal mine closure to prevent economic shocks and associated social disruptions.

  • Tailor social protection to minimize income loss during coal mine closures.

  • Assign gender equality and social inclusion focal points and mandate inter-ministerial coordination to help embed inclusion into governance.

Indonesia’s shift away from coal offers a powerful opportunity to advance its climate commitments under the Paris Agreement while building more resilient, diverse, and inclusive local economies. This report assesses how a well-managed transition can unlock new engines of growth and quality jobs across five major coal-producing provinces: East Kalimantan, South Kalimantan, South Sumatra, Central Kalimantan, and Jambi.

Combining quantitative modelling with qualitative field research, the study examines how planned coal phase-outs could reshape economic output, employment, and livelihoods—especially for informal workers, women, and youth. It evaluates three policy scenarios that range from business-as-usual contraction to proactive, investment-led strategies that channel resources into high-multiplier industries and emerging green economy sectors.

The findings highlight that, while provinces such as East Kalimantan and South Sumatra face higher exposure to coal decline, targeted investment in food and beverage manufacturing, green industries, and other diversified sectors can drive robust job creation and economic renewal. More diversified regions, like Jambi, are already well-positioned to capture these opportunities. Insights from East Kutai show that communities are eager for alternatives and that inclusive planning, stronger social protection, and workforce reskilling can ensure people benefit directly from the transition.

The report concludes with strategic recommendations for national and local governments to seize this opportunity: strengthen institutional coordination, mainstream gender equality and social inclusion, expand safety nets, and develop locally tailored transition roadmaps. It also underscores the importance of combining macroeconomic analysis with community-level insights to design a just, job-creating, and future-ready energy transition for Indonesia.

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Participating experts

Bathandwa Vazi

Policy Advisor

Philip Gass

Director, Energy Program, Just Transitions and Canada

Report details

Topic
Energy
Gender Equality
Just Transition
Sustainable Development Goals
Impact area
Climate
Social Equity
Sustainable Economies
Publisher
IISD
Copyright
IISD, 2025